LMIRT Q1 DPU falls 33% year on year to 0.08 Singapore cent

THE distribution per unit (DPU) for Lippo Malls Indonesia Retail Trust (LMIRT) for its first quarter ended March 31 fell 33.3 per cent to 0.08 Singapore cent from 0.12 Singapore cents in the year-ago quarter.

Gross revenue similarly fell 32.8 per cent year on year from S$64.93 million in Q1 FY20 to S$43.61 million in Q1 FY21. Meanwhile, gross rental income (GRI) fell 27.6 per cent year on year to S$26.48 million; net property income (NPI) fell 35.2 per cent year on year to S$25.78 million.

In a bourse filing on Tuesday, LMIRT's manager said that the decrease in GRI was mainly the result of discounts given to tenants as a result of Covid-19. Q1 FY21's figures also included relief adjustments given to selected key tenants, including both related and non-related party tenants, to support their business recovery.

Additionally, the decrease also came from the loss in income of about S$3 million from Binjai Supermall in North Sumatra and Pejaten Village in Jakarta, which were divested in Q3 2020.

However, Lippo Mall Puri, acquired on Jan 27, contributed some S$5.9 million for the quarter, partially offsetting the decrease.

On a quarter-on-quarter basis, LMIRT's DPU doubled from 0.04 Singapore cent in Q4 FY20 to the current 0.08 Singapore cent for the quarter.

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Total gross revenue rose 59.4 per cent quarter on quarter from Q4 FY20's S$27.35 million, while net property income (NPI) in Q1 FY21 more than doubled from the previous quarter's S$10.63 million.

James Liew, chief executive of the manager, noted that the quarter-on-quarter improvement was as a result of gradually improving operating conditions in Indonesia, given the rollout of the vaccination programme that started in January, and the government's continuous efforts to curb the spread of the pandemic.

The manager was thus able to reduce the average rental and service charge discounts to tenants, even as selected key tenants continued to be granted additional reliefs, he added.

As at March 31, LMIRT's gearing ratio stood at 41.7 per cent, with total debt amounting to S$859.4 million.

In a statement accompanying the release of its results, LMIRT's manager said that the trust fulfilled all its financial obligations in 2021, including the repayment of the S$44 million revolving credit facility and early refinancing of a S$175 million term loan facility due in August.

"To this end, LMIRT has no refinancing needs owing to non-related lenders until November 2022," it added.

The manager expects the recovery from Covid-19 to be uneven across Indonesia.

"Tenants in certain retail segments (both related and non-related party tenants) will continue to face significant challenges, and additional rental and service charge reliefs will need to be granted to such tenants in order to maintain occupancy and sustain their recovery, although such additional reliefs have also been gradually reduced compared to the levels granted in FY2020."

It added: "A modest and prudent distribution strategy will be adopted, although such distribution will be reflective of improvements, if any, in LMIRT's financial performance as well as completion of the acquisition of Lippo Mall Puri, which comes with guaranteed NPI support from the sponsor."

Units of LMIRT closed S$0.001 or 1.43 per cent higher at S$0.071 on Tuesday, prior to the results announcement.